Taser Consulting is a consulting firm owned and operated by Annamarie Phipps. The following end-of-period spreadsheet was prepared for the year ended October 31, 2018: Taser Consulting End-of-Period Spreadsheet For the Year Ended October 31, 2018 Unadjusted Trial Balance Adjustments Adjusted Trial Balance Account Title Dr. Cr. Dr. Cr. Dr. Cr. Cash 45,000 45,000 Accounts Receivable 119,200 119,200 Supplies 11,900 7,500 4,400 Office Equipment 400,000 400,000 Accumulated Depreciation 56,000 6,000 62,000 Accounts Payable 20,500 20,500 Salaries Payable 9,000 9,000 Common Stock 75,000 75,000 Retained Earnings 180,700 180,700 Dividends 25,000 25,000 Fees Earned 800,000 800,000 Salary Expense 520,000 9,000 529,000 Supplies Expense 7,500 7,500 Depreciation Expense 6,000 6,000 Miscellaneous Expense 11,100 11,100 1,132,200 1,132,200 22,500 22,500 1,147,200 1,147,200 Based on the preceding spreadsheet, prepare an income statement, retained earnings statement, and balance sheet for Taser Consulting. Be sure to read the instructions for each financial statement carefully.
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
| Taser Consulting | ||||||
| End-of-Period Spreadsheet | ||||||
| For the Year Ended October 31, 2018 | ||||||
| Unadjusted |
Adjustments | Adjusted Trial Balance | ||||
| Account Title | Dr. | Cr. | Dr. | Cr. | Dr. | Cr. |
| Cash | 45,000 | 45,000 | ||||
| 119,200 | 119,200 | |||||
| Supplies | 11,900 | 7,500 | 4,400 | |||
| Office Equipment | 400,000 | 400,000 | ||||
| 56,000 | 6,000 | 62,000 | ||||
| Accounts Payable | 20,500 | 20,500 | ||||
| Salaries Payable | 9,000 | 9,000 | ||||
| Common Stock | 75,000 | 75,000 | ||||
| 180,700 | 180,700 | |||||
| Dividends | 25,000 | 25,000 | ||||
| Fees Earned | 800,000 | 800,000 | ||||
| Salary Expense | 520,000 | 9,000 | 529,000 | |||
| Supplies Expense | 7,500 | 7,500 | ||||
| Depreciation Expense | 6,000 | 6,000 | ||||
| Miscellaneous Expense | 11,100 | 11,100 | ||||
| 1,132,200 | 1,132,200 | 22,500 | 22,500 | 1,147,200 | 1,147,200 |
| Based on the preceding spreadsheet, prepare an income statement, retained earnings statement, and |
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